February 19, 2012

Sunday Evening Reads: Who's Afraid of a Little Inflation?

Kevin Drum, writing for Mother Jones, discusses Dylan Matthews' Washington Post piece about Modern Monetary Theory. That theory, like that of John Maynard Keynes, prescribes government deficit spending during recessionary periods as a means to stimulate economic activity.

While Keynes' theory eschews continued deficits after a recession has passed, MMT claims that deficits don't hardly matter at all. It's an interesting claim, born out by recent US economic history.

Paul Krugman begs to differ, though, in a short piece on his blog last year.

Fifteen minutes of accessible economic discussion, with links to more. Turn off the tube and learn something.